Bargale Industries, Inc. v. Robert Realty Co.

O’Donnell, J., delivered the opinion of the Court. This litigation involves the liability of the appellants, BarGale Industries, Inc. (BarGale), and Benjamin L. Goldstein (Goldstein) and his wife Beverly, now deceased, to the appellee, Robert Realty Company, Inc. (Robert Realty) for a “finder’s fee” in connection with the obtention of a first mortgage loan in the amount of $193,000 from Suburban Trust Company (Suburban) and in having that commitment increased to $214,000. Goldstein, president of BarGale who, with his wife, owned 78% of the common stock in BarGale, in connection with a planned relocation and expansion of BarGale’s facilities, in August 1972 purchased for $60,000 a tract of land in Owings Mills Industrial Park where it was planned to erect an 18,000 square feet industrial building. Needing additional funds to complete settlement, the Goldsteins, on December 15, 1972, borrowed $35,000 from Mose I. Speert (Speert), president of Robert Realty.

That loan was secured by a mortgage upon the land, and a note payable on April 15, 1973. “Points” totalling $2,500 were charged by Speert in connection with the transaction. 1 Later in December 1972, or early January 1973, Goldstein, having obtained an estimate of $165,000 for the erection of the building — and being obligated to Speert under the note ⁶⁴⁰ — again approached Speert with a request that he assist in obtaining a mortgage of “about $185,000.” During these discussions Speert advised Goldstein concerning his estimated eventual costs, counselled him “to seek more money,” and told him that if he wished Speert to obtain such a mortgage his fee would be $10,000. Their discussions and understanding were culminated in a letter of authorization dated January 24, 1973, addressed to Robert Realty on the stationery of BarGale Industries, signed by Goldstein, which read as follows: “This letter will serve as your authorization to act as our agent for a period of thirty (30) days, for the purpose of arranging a construction loan and permanent first mortgage financing in an amount not less than Two Hundred Thousand ($200,000.00) Dollars and preferably, in the amount of Two Hundred Twenty-Five Thousand ($225,000.00) Dollars, oh an industrial building to be erected by us on land we have recently acquired in the Owings Mills Industrial Park. The mortgage will be amortized over a period of fifteen (15) years, with interest at the rate of eight and one-quarter (8 V4%) to eight and one-half (8 1/i%) per cent per annum. The land and building will be used to secure the mortgage. . . . “In the event you are successful in securing a commitment for such mortgage, we agree to pay you, at settlement, a fee of Ten Thousand ($10,000.00) Dollars for your efforts.” Supplied with copies of financial statements, preliminary drawings of the proposed building, samples of BarGale’s products and its advertising materials, Speert went to work.

Although rejected by the Equitable Life Insurance Company, Speert contacted the manager of the Reisterstown Road branch of Suburban who, in turn, arranged a meeting with that bank’s real estate officer. These efforts, after several meetings, resulted in a written commitment from Suburban, dated February 15, 1973 (eight days prior to the ⁶⁴¹ termination date set forth in the agreement) of a mortgage in the amount of $193,000, with interest at 8V2%, amortized over a period of 20 years. Although the commitment was for less than the total amount the appellants hoped to obtain, it was otherwise within the bounds specified. Goldstein accepted it, and the trial court so found. 2 Thereafter, Goldstein, learning that the original estimated costs of construction had accelerated and that extra construction was required to satisfy the requirements of the Public Works Department of Baltimore County, again sought out Speert explaining that in order to complete the contemplated improvements additional mortgage money was required.

Speert volunteered to help to arrange for such additional funds and at a meeting on March 17, 1973, called at BarGale’s offices at the request of Goldstein, Speert on behalf of Robert Realty agreed that he would “exert [his] best efforts to influence the Suburban Trust Company to increase their commitment from $193,000 to some larger greater amount.” He further agreed that if Goldstein found that he could not obtain such additional money that he (Speert) would “personally loan him $25,000 or $35,000 by way of a second mortgage.” Speert again visited Suburban’s real estate officer, advised that the costs of construction had increased, that there was need for additional funds and requested that Suburban review their commitment with the idea of increasing it. This was followed by a letter dated April 30, 1973 from Goldstein, as president of BarGale, to Suburban requesting that it change “our original agreement from $193,000 to $250,625.00 to include these additions.” On May 17, 1973 Suburban issued a written “amended commitment” in the amount of $214,000 upon the same terms as set forth in the original. Although Goldstein had requested a much larger sum the amended commitment also was accepted. Settlement was held on June 7, 1973 and the loan proceeds were used to construct the planned building. ⁶⁴² Prior to settlement there had been no indication that the appellants would not pay the agreed fee.

Thereafter, however, upon inquiry by Speert, Goldstein advised that the matter had been “turned over” to his attorney. On June 22, 1973, counsel for the appellants wrote Speert disclaiming liability on the ground that the commitment for $193,000, although obtained within 30 days of the agreement, was less than the amount specified. Robert Realty instituted suit in the Circuit Court for Baltimore County against the appellants individually and jointly. During the course of that non-jury trial (before Proctor, J.) the appellee, pursuant to Maryland Rule 413 a 2, offered in evidence the deposition of Goldstein as an adverse party, as well as an officer of BarGale.

When deposed, Goldstein admitted that he had “accepted” in writing Suburban’s original mortgage commitment of $193,000; he acknowledged that he told Speert that he “needed more money” and that when Speert volunteered to “try to get more money,” he probably said “Okay,” and expected to pay Speert “the original commitment” if he succeeded; that although he recognized that the 30-day period had expired when asked if he “expect[ed]” that he (Speert) was going to do it for nothing, responded “absolutely no,” that he “would be paid pursuant to the original contract which [was] $10,000.” This acknowledgment by Goldstein that he didn’t expect Speert to perform additional services gratis and that he expected to pay him in accordance with the original commitment if he was successful in obtaining additional money was repeated — although with some equivocation — in the deposition. The trial court in entering judgment in the amount of $10,000 against the appellants jointly, 3 after citing Griffith v. Scheungrab, 219 Md. 27 , 146 A. 2d 864 (1958) found that: ⁶⁴³ “[T]he requirement of a minimum mortgage loan of $200,000.00 was waived by the acceptance by the Defendants of the commitment in the amount of $193,000.00, at which time there was in effect a novation of the understanding between the parties. Not only that, but Mr. Speert performed additional services in getting the original commitment of $193,000.00 increased to $214,000.00, which was not only accepted by Defendants but settled and the proceeds used to construct the desired building, although the ultimate cost unquestionably exceeded the amount of the mortgage loan.” (emphasis added). Seizing upon the lower court’s mention of the word “novation,” the appellants devote their entire argument to the contention that a novation never occurred.

They argue that a unilateral contract existed between the parties and that only a performance by the appellee falling strictly within the original terms of the letter-agreement can suffice to establish an entitlement to the fee. The appellants contend that the trial court was in error “in finding that a ‘novation of the understanding, between the parties’ resulted from the ‘waiver’ by the [appellants] of a minimum mortgage requirement.” At no point in their argument do they undertake to explain why they should not have been held liable for the stipulated fee by having accepted an amount less than that specified. “[I]t is elementary that either party to a contract may waive any of the provisions made for his benefit.” Twining v. Nat’l Mortgage Corp., 268 Md. 549, 555 , 302 A. 2d 604, 607 (1973), citing Shoreham v. Randolph Hills, 248 Md. 267 , 235 A. 2d 735 (1967). A waiver is the intentional relinquishment of, a known right, or such conduct, as warrants an inference of the relinquishment of such, right, and may result from an express agreement or be inferred from circumstances. “[A]cts relied upon as constituting a, waiver of the provisions” of a contract must be inconsistent with an intention to insist upon, enforcing such provisions. Canaras ⁶⁴⁴ v. Lift Truck Services, Inc., 272 Md. 337, 360 , 322 A. 2d 866, 877 (1974); Food Fair Stores, Inc. v. Blumberg, 234 Md. 521, 531 , 200 A. 2d 166, 172 (1964).

In Canaras, supra, we quoted with approval from 5 S. Williston, Law of Contracts § 678 (3rd ed. 1961) as follows: “A waiver may be either verbal or in writing; and it is not necessary that the waiver should be direct and positive. It may result from implication and usage, or from any understanding between the parties which is of a character to satisfy the mind that a waiver is intended. The assent must, however, be clearly established and will not be inferred from doubtful or equivocal acts or language.” 272 Md. at 360-61 , 332 A. 2d at 879 (emphasis added). Whether or not there has been a waiver of such a right under a contract is generally a question of fact.

See Fidelity and Casualty Co. of N. Y. v. Dulany, 123 Md. 486, 496 , 91 A. 574, 577 (1914). In Griffith v. Scheungrab, Supra, cited by the lower court, Judge Hammond for the Court stated: “Where a contractual duty is subject to a condition precedent, whether express or implied, there is no duty of performance and there can be no breach by nonperformance until the condition precedent is either performed or excused.” 219 Md. at 34 , 146 A. 2d at 868 (emphasis added). By the letter of January 24, 1973, setting forth the understanding between thé parties, the appéllants imposed two conditions precedent: (1) that the commitment be obtained within 30 days and (2) that it be in the minimal amount of $200,000. When Suburban on February 15, 1973 made a commitment for a mortgage in the amount of $193,000, one of the conditions precedent had been met — the commitment was secured within 30 days.

The appellants at that time had a choice of either rejecting the commitment obtained and requiring the appellee to obtain a commitment in the minimal amount of $200,000 within the remaining ⁶⁴⁵ eight days of the 30 days allotted, or to accept the commitment as made. Goldstein admitted that he had, in writing, accepted the commitment. The acceptance was buttressed by his letter to Suburban wherein he acknowledged the “original agreement,” but requested an increase to $250,625. His conduct, as the trial court obviously found, constituted by word and act, an unequivocal waiver of one of the conditions precedent — the right to insist that the mortgage commitment be in the minimal amount of $200,000.

This acceptance of the commitment for $193,000 was “inconsistent with an intention to insist upon enforcing” such provision. There